Questions are around the topic of Treasury Stock/Stock Buybac and the accounting treatment of buybacks as well as the financial advantages and disadvantages. Please assist in answering all questions. I greatly appreciate the assistance, thank you 1).Define treasury stock/stock buyback. 2). Explain accounting treatment of buy-backs, including purchase, subsequent sale and retirement of stock. 3). Explain the impact buyback has on corporate cash, retained earnings, EPS and the stockholder and reasons corporations buy their own stock. 4). Discuss the buyback’s implication on corporate financial strength and outlook. 5). Discuss alternatives that could improve financial strength. 6). Proponents claim that buybacks are a means of distributing cash to stockholders. Explain and critique this position. Solution.

1. Questions are around the topic of working capital. Please assist in answering both questions. I
greatly appreciate the assistance, thank you.
1). Describe “distorted liquidity picture”.
2). Which approach, the conventional the best practical and theoretical application is best.
Solution
Answer: 1) Distorted Liquidity Picture:Distorted Liquidity Picture is the "misclassification"
creates a distorted picture about the maturities of deposits, affecting the liquidity risk assessment
by the banks and supervisor.
Answe:2) The conventional is the best practical and elegent and provide powerful solution.